Shalimar Paints, which declared suspension of work at its Howrah plant last week, said it did not have the requisite financial strength to repair and rebuild the fire-damaged factory, the company's oldest.
"The company does not have the required financial strength to rebuild and repair the Howrah plant. The final estimates for rebuilding and restoring full-scale operations has been arrived at Rs 60 crore and are beyond the resources of the company," a company spokesperson told PTI.
As a listed entity, the company's operations and books are transparent and we have no additional funding source to cater to this need, the official said. The company does have the borrowing capacity from banks and all the cash and reserves were deployed as working capital, she said.
"Last year the company suffered a loss of Rs 2.8 crore and it does not seem to have the funds to invest in rebuilding this plant. The sanctioned borrowing limit of the company is Rs 110 crore, which has been reached due to investment in working capital. The company does not have further capacity to borrow," the spokesperson said.
Saying the company was committed to the state, the spokesperson said the eastern region contributed to around 30 per cent of the overall business of the company. "This is significantly higher than the industry average. West Bengal continues to be a key market for us and we will continue to focus on this region," she said.
The Howrah plant, which employed 154 workers, caught fire in March this year. The spokesperson said the fire incident had totally halted production. A day after the plant's closure, West Bengal labour minister Malay Ghatak convened a bipartite meeting with the management of Shalimar Paints, which ended in an inconclusive manner. Besides Howrah, the company has manufacturing plants at Nashik (Maharashtra) and Sikandrabad near Delhi.
